Flood levy vehemently opposed by Irish homeowners

02 Apr 2014
Posted by Miriam O'Neill

Read our latest press release here on what you think about the proposed 1% flood levy

Irish Homeowners are emphatically against a proposal by Government to add a flood levy of 1% to insurance policies to enable some 50,000 houses to get flood cover. The idea put forward by Minister Hogan last month has been met with wide-spread cynicism in an AA Consumer Panel poll of 16,500 people countrywide.

Just 13% of a sample of 16,500 people polled on the issue said the levy would have their full support as a means of financing enhanced flood prevention infrastructure along our coasts and riverbanks.

“Minister Hogan is at least attempting to come up with constructive proposals for what is a very real problem.” Says AA Director of Consumer Affairs Conor Faughnan. “However we found wide-spread cynicism in response. People seemed to be supportive of the principle but had little faith that Government would use the money appropriately. 87% did not believe that the State would keep a promise to spend the money on flood relief; 76% felt that paying property tax was enough.”

“At the very least the government has an uphill struggle to convince people but that is not a criticism in itself. The Minister has expressed his frustration that the insurance industry has not been able to provide solutions. His 1 per cent proposal should at least kick-start a more meaningful debate.”

The AA provides home insurance cover to 65,000 policyholders in Ireland and understands the problem well. Paradoxically recent improvements in accurate mapping of flood risk has made the problem worse for some people.

“Home insurers nowadays, AA included, are a good deal more sophisticated when it comes to things like geo-coding and risk mapping.” Says Faughnan. “That has meant that many more people can get flood cover which is obviously good but it has also left many other home-owners more isolated than ever.”

The challenge is twofold. Firstly Ireland needs a broader strategy to deal with the flooding and severe weather events that are becoming more common; secondly there must be some insurance or relief provided for homes in locations that are at risk.

The AA research of public opinion showed that people did express solidarity with victims of flooding but did not trust the state with an additional levy based on the experience of existing taxes.
“Numerous people polled likened the levy to Motor Tax and VRT.” Says Faughnan. “Given the treatment of these taxes by Government it’s of little surprise that many homeowners are so cynical about it.”

The AA reveals that support for the levy would be slightly stronger if the revenue it generated was used for a different purpose; no holds barred access to flood insurance cover for every home in the country irrespective of claims history or location. 22% said they would be fully behind its introduction if that was the case. In contrast however, 28% said they would be utterly opposed to it for that purpose.

Over 1,000 individual comments were also received in relation to the topic during the AA’s poll and while the opinions expressed were mixed, they reveal that the frustrations of many were primarily directed towards the local authorities who awarded planning permission in the high risk areas which have now become so problematic.

In line with this, just 8% of those polled said they fully agreed with the statement: “I think flood victims have only themselves to blame for buying in a high risk area.”
Feeling the burden of the ever widening tax net perhaps, high volumes of the poll’s respondents agreed that the Government should find the necessary funds from the revenue they already generate from the existing 5% levy on non-life insurances and the property tax. Summing up the thoughts of many of those polled the AA shares that one respondent wrote “the air we breathe will be taxed next.”

There would also appear to be a high degree of scepticism in terms of how the monies generated from the 1% levy would be used. 87% of those polled expressed doubt that the revenue from it would be exclusively funnelled into flood relief or capital expenditure on flood defences.

Want to have your say on the issue, post here or send us an email to publicaffairs@theaa.ie

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Miriam O’ Neill, PR Exec at AA Ireland began working in the AA in August 2010. Miriam’s core activities on a day to day basis include management of the AA’s media relations programme, generation of quality coverage in support of key business lines, provision of content for AA social media channels and the AA customer Ezine, regular broadcast interviews, occasional events management and interactions with the large AA customer base on motor policy issues.